Sealed, Redacted and Censored: Saving Citigroup, Killing America

By Pam Martens: September 23, 2013

Richard M. Bowen III wants to leave this country better off than the way he found it for the good of the next generation. So does this public interest web site. So do most Americans. Unfortunately, we all have a serious roadblock: the sealers, redactors, censors and enablers who are keeping Wall Street’s crimes from seeing the light of day in a public courtroom and its criminals from observing the shadows of a darkened cell.

Yesterday, journalist William D. Cohan penned an “opinion” piece for the New York Times. (The word “opinion” was likely placed over the fact-intensive article to eliminate the potential for Brad Karp, Citigroup’s serial go-to lawyer for its serial get-out-of-jail free cards, to sue the New York Times.) The thrust of the article is that Brad Karp pressured the Financial Crisis Inquiry Commission, tasked by Congress to get to the bottom of the culprits and causes of the collapse of Wall Street in 2008, to censor part of whistleblower Richard M. Bowen’s public testimony before the Commission. Karp, who works for the Wall Street law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, is quoted in the article as denying the charges.

As Wall Street On Parade previously reported, Bowen is the Citigroup whistleblower who appeared on the December 4, 2011 edition of 60 Minutes, telling viewers that once he brought the internal corruption to the attention of the most senior executives at Citigroup, including Board Member Robert Rubin, the former U.S. Treasury Secretary, he had his duties reassigned and was told to remain off the premises.

Cohan reports in the New York Times that “Mr. Bowen says the F.C.I.C. wanted him to delete his concern that Citi may have materially misrepresented its certifications of internal controls, which require corporate officers to certify the accuracy of their financial statements under Sarbanes-Oxley.” Bowen says he was also pressured to “Remove the names of people at Citi…Take out his post-Rubin denouement, his conversations with the bank’s internal lawyers and the fact that Citigroup’s outside attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP were conducting an investigation of his charges.”

Phil Angelides led the Financial Crisis Inquiry Commission. He told Cohan he had no knowledge of Bowen being censored. He does concede, however, that the Wall Street banks  “and their phalanx of attorneys were putting enormous pressure” on the commission “every day of every week with every witness” in an effort “to discredit people who were testifying against their interests.”

Brad Karp has been tapped so frequently by Citigroup for its seemingly never-ending fraud charges that we previously queried if Brad Karp has some secret sauce for getting the banking behemoth off the hook. It was lucky indeed for Karp when the deeply-conflicted arbitrators hearing the $4 billion fraud allegations against Citigroup by the Abu Dhabi Investment Authority (ADIA), refused to permit discovery on Bowen’s claims that Citigroup’s top executives were aware of financial skullduggery afoot at the firm three weeks before the company accepted a $7.5 billion infusion of cash from ADIA.

Bowen joins a long line of people who have been censored or redacted to protect Citigroup’s “trade secrets.” In a March 25, 2013 letter to Wall Street’s regulators, Senator Elizabeth Warren and Congressman Elijah Cummings argued that “Criminal activity should not be shielded by regulators as if it constitutes proprietary information or trade secrets.”  But that’s precisely what appears to be happening.

The SEC is one of the worst offenders when it comes to redacting documents. In this December 14, 2007 letter, Gary Crittenden, CFO of Citigroup at the time, responds to questions of serious financial irregularities posed by Kevin Vaughn, then Branch Chief of the SEC. Pages 23 through 36 of this correspondence are completely redacted. Almost six years later, the material is still redacted on the SEC’s web site because Citigroup, a serial miscreant, wants it kept secret.

In 2011, the Inspector General of the SEC investigated claims by an unnamed whistleblower from inside the SEC that a Citigroup settlement had been procured through misconduct on the part of the head of enforcement at the SEC, Robert Khuzami. The whistleblower alleged that Khuzami had a “secret conversation” with his “good friend” and former colleague, a prominent defense counsel representing Citigroup. According to the whistleblower, as a result of that secret conversation, fraud charges were dropped. The Inspector General’s investigation did not find evidence of the whistleblower’s claim that there was “serious problems with special access and preferential treatment” at the SEC. But the public cannot make a serious assessment of the matter because the Inspector General’s report has been deeply redacted.

Note: Pam Martens worked on Wall Street for 21 years. She is the editor of Wall Street On Parade. From 1996 through 2001, Martens challenged Wall Street’s mandatory arbitration system in the U.S. District Court for the Southern District of New York and at the 2nd Circuit Court of Appeals. She also challenged a Citigroup unit’s employment practices. Brad Karp represented Citigroup in the matter.

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